CETA issues hindering Canadian grain exports: Chamber of Commerce

Non-tariff related trade barriers are continuing to impede this country’s grain industry from reaping the full benefits of the Comprehensive Economic Trade Agreement between Canada and the European Union, a new report from the Canadian Chamber of Commerce says.

“The experience in the crop sector has been mixed in comparison to total Canadian exports to the EU,” reads the report, titled ‘CETA Issue in Focus: Opening opportunities in the Canadian crop sector.

“A wide range of factors affects trade flows. However, governments play a direct role influencing market forces through the policy environment within which businesses operate,” it continues. “It is here, on non-tariff barriers, that improvements are needed to help Canadian companies increase access to the EU, particularly in agriculture.

Canada and the EU signed CETA on October 30, 2016. The deal has been provisionally applied since September 2017 as the agreement has not yet been fully ratified. Prior to CETA, agricultural trade between Canada and Europe was valued at some $3.5 billion annually. Under CETA’s provisional application, almost 94 per cent of EU tariff lines are duty free.

But overcoming these non-tariff trade barriers, the Chamber of Commerce argues, requires improved communications between industry and government, as well as increased transparency and regulatory harmonization.

“To ensure our government officials have relevant business intelligence, there should be an annual platform for Canadian businesses to engage with government officials involved in the breadth of CETA institutional bodies to provide a forum for feedback from the business community,” the report argues.

Those conversations, the Chamber of Commerce said, would occur on an annual basis and would align with the “yearly cycle of CETA institutional committee meetings.” It also recommended that the Canadian government develop a single online dashboard that would let Canadian businesses track Canadian CETA-related complaints and issues easily, which would help alleviate industry frustration and boost business engagement.

“While it obviously does take two willing parties to make a regulatory cooperation outcome occur, we also need to draw attention to where issues language for no justifiable reason,” the report notes. “A single online dashboard keeping an ongoing tally of Canada’s asks across the CETA committee structures would shine a light on where the European Commission is unduly blocking outcomes that would aid Canadian businesses.”

Better regulatory cooperation could also be achieved, the Chamber of Commerce added, if the United States was granted observer status in CETA’s Regulatory Cooperation Forum – the trade agreement’s main regulatory body – with the EU being granted similar status in the Regulatory Cooperation Council between the United States and Canada.

Doing so would increase trust between the three parties. “This can also be a first step down the long path of obtaining greater regulatory coherence between all three parties in a way that would reduce the burden for Canadian exporters that want to access both markets,” the report argues.

Agriculture-related trade issues, the Chamber of Commerce said, should also be made a “standing agenda item at the Joint Committee and Regulatory Cooperation Forum to ensure that we are using all possible avenues” to resolve issues.

In addition to these recommendations, the Chamber of Commerce warned the federal government must continue to push for a resolution to an ongoing trade dispute between Canada and Italy over durum wheat exports. Italy’s country-of-origin labelling policy on wheat products, the Board argued, has “been disastrous” for Canada’s durum wheat sector, where exports have plummeted in the past five years.

Discussions on this file, the Board said, would likely be difficult given the current political climate in Italy. “However, it is vital to place a firm marker down to both resolve this issue and push back against protectionism.”

Conversation between Canada and Europe on maximum residue levels, pesticide registrations, biotechnology and responses to instances of low-level presences must also continue, the Board said.

On biotechnology approvals specifically, the Chamber of Commerce said Canada and EU should work to “reduce asynchrony” around approvals and “have a goal in both countries of gaining approvals within 24 months or less of submission.”

That timeline, the report noted, could be met if Canada and the EU developed common safety assessment for new biotechnologies that have already been approved in one jurisdiction. “These tools to facilitate the approvals process are vital for addressing real, rather than theoretical problems, in the EU,” the Chamber of Commerce said, referring to ongoing approval delays, which on average takes nearly four months for a decision to be rendered.